Is Buying a Fixer-Upper Right for You?
Limited inventory and rising home prices have some potential buyers considering a viable solution they may have ignored when they first began searching – buying a fixer-upper. Some of these homes simply need a little fixing, which is a great option, and others may need a lot of repair, which is riskier.
The range in what fixer-upper homes need can be vast. So, ask yourself this: Is buying a fixer-upper the right choice for you, and how much fixing is too much for you to handle?
Here are a few things to consider:
- Evaluate how much you are able to do yourself by putting in the time and effort. You need to be honest with yourself about your actual level of home improvement skills, and your strength and stamina for completing such a project.
- If the right things are wrong with a house, you could not only turn it into your dream home, but also earn serious equity (wealth building!) in the process.
- Don’t assume you need to be a DIY master to make it worthwhile, either. Time and patience and skills may be all you need.
- Keep in mind that if you lack the right skills to do the job correctly and don’t hire a professional to do it, the work may not be up to standards other people would expect. This could decrease the resale value of your home.
- You must be comfortable with living in a work zone for extended periods of time.
- Are the repairs something you can do over time, or are they imminently needed? If you can’t do or afford a critical repair right away, this is not for you.
- Expect that each time when you get into a project, an unexpected additional repair might be unearthed. You must be able to budget accordingly.
Finally, a home inspection is a must before you buy a fixer-upper because it could inform you of any structural issues with the home. Don’t purchase a home unless you feel strongly assured that you have uncovered all of its structural problems and you can tackle and afford the repairs it will require.
Your offer on the home, should you choose to buy, should reflect the cost of the repairs needed. This means the current market value of the home if it were in good condition, minus the cost of repairs. Your Realtor can advise you about what similar properties are selling for in the current market. Make sure to ask questions and keep an open mind when it comes to fixer-uppers.
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